Etsy Inc.’s stock tumbled 9.6% in afternoon trade Monday, putting on track to close at the lowest price since going public on April 16, after analyst James Cakmak at Monness Crespi Hardt slapped a sell rating on the online craft marketplace because of concerns over competition from Amazon.com , rising marketing costs and the large supply of shares that will become available for sale. He set his stock price target at $10, which is 20% below current levels, and 38% below its initial public offering price of $16. Cakmak said three phases of post-IPO lock-up agreements are set to expire between now and April 2016, representing about 90% of the shares outstanding. He said the cost of acquiring buyers is rising, meaning what the company spends on marketing may have to rise faster than expected to re-accelerate customer growth. “While we are fans of the Etsy story, we believe near-term risks may help facilitate entry into the shares at a more favorable time when the risk-reward tradeoff tilts back toward the latter,” Cakmak wrote in a note to clients. The stock has tumbled 24% over the past three months, while the S&P 500 has lost 7.1%.
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